The average has increased by $10,000 in less than a decade.
According to Kelly Blue Book's latest market research, the average price of a new car sold in September 2021 was $45,031. This is the first time the average transaction price has gone above $45,000. Kelly Blue Book notes that this is the sixth consecutive month this figure has increased. In 2016, that figure was $34,077. That's more than $10,000 in less than a decade.
In contrast, the number of cars sold is down. There was a 7.3% decline from August to September, making last month one of the slowest in the past decade.
How does the math on that work? Simply put, people purchased more expensive cars.
"The record-high prices in September are mostly a result of the mix of vehicles sold," said Kayla Reynolds, an analyst for Cox Automotive, the parent company of Kelly Blue Book. "Midsize SUV sales jumped in September compared to August, and full-size pickup share moved up as well. Sales of lower-priced compact and midsize cars, which had been commanding more share during the summer, faded in September."
The ongoing semiconductor chip shortage is playing a significant role. Many manufacturers have either stopped manufacturing or have pushed what little chips they have available into cars with a higher profit margin. The profit margin on a midsize SUV is quite good, which is why manufacturers will keep pushing in that segment.
Many people in the market for a new car are delaying a purchase, but not nearly enough to drive pricing down. "As long as new-vehicle inventory remains tight, we believe prices will remain elevated," Reynolds said. Some dealers are even using shady tactics to increase prices at the last minute.
The lack of inventory is also making it harder for shoppers to find discounts. Incentivized purchases made up just 5.2% of the average transaction price. A year ago, that figure was a healthy 10%.
Luxury vehicles are also making a massive comeback. Sales were up by 16.6%, which is some of the highest figures Kelly Blue Book has seen in a decade, with the average amount of money spent on a new luxury vehicle reaching $60,845. Acura, Cadillac, Genesis, and Mercedes-Benz saw their average sale price grow by more than 20% compared to a year ago.
Most of the brands mentioned above tend to offer luxury at a reasonable price. Acura and Genesis are both considered realistic rivals to the established German luxury manufacturers but at a more affordable price. The new Genesis G80 is a prime example.
For the record, the best-selling truck in 2020 was the Ford F-Series, with 787,422 units sold. The best-selling car, or midsize SUV for that matter, was the RAV4, with 430,387 units sold. The top three remain the F-150, Chevrolet Silverado, and Ram 1500, followed by the RAV4, Honda CR-V, and Toyota Camry.